Analytics, Banks, Financial Services, Inflation, Latvia

The Bank of Latvia council today decided to raise the inflation forecast for this year based on report of macroeconomic analysis specialists on the situation in Latvia’s and global economies.

"The world’s food price trends and oil price hike compared to the respective period last year suggest that inflation this year will rise steeped than predicted earlier," the bank said.

In parallel to the world food price hike, food retail prices in Latvia have also increased.

At the same time, pressure of demand on inflation is not rising. "The national economy is still in a macroeconomic balance. The unemployment level has been close to the natural level for four years. Regulated prices show a moderate growth," the bank said.

The central bank noted that natural gas prices might rise steeper due to market liberalization.

As reported, in February 2017, Latvian consumer prices rose by 0.4% against January 2017, while annual inflation (February 2017 against February 2016) hit 3.3%, according to the data released by the Central Statistics Bureau (CSB). During the last 12 months, consumer prices increased by 0.7% against the previous 12 months.